Shared Leadership: How Modern Businesses Run Themselves

Business management is rapidly changing from old authoritarian models to more open methods at many companies that have been inspired by the culture of social media and Web 2.0 technology and have begun facilitating the sharing of information on ideas and projects.

Call it Business Management 2.0, in which firms essentially run themselves — up to a point, anyway.

Dubbed “shared leadership,” the new approach to getting work done is being employed by more and more companies, big and small alike. It could help small businesses grow without investing in new employees or high-salaried managers.

“Most companies are organized on the premise that the smartest company is the one with the smartest individuals given the authority to manage work of others,” said Rod Collins, author of Leadership in a Wiki World (Dog Ear Publishing, June 2010). “The digital revolution is spawning an entirely different management model where the assumption is that the smartest companies have quick access to the collective knowledge of the company.”

Collins used the example of Newark, Del.-based W.L. Gore Associates, a 9,000-employee firm that makes Gore-Tex, among other things. The company, though large, keeps its offices small, with no more than 150 people in each office. According to Collins, Gore works essentially without supervisors and work is accepted by employees, rather than assigned to them. It uses its employees’ collective knowledge of people to develop ideas and work flow.

For small businesses, shared leadership could be as simple as creating a meeting format in which employees talk about how ideas are different and where there is agreement rather than arguing over whose idea is better, Collins said.

“The best examples of shared leadership are when decision making gets spread across multiple individuals,” said Greg A. Chung-Yan, professor at Ontario-based University of Windsor whose recent research finds that employees are happiest when given the autonomy to determine how best to do their jobs. “That comes from idea of empowering individuals in organizations so they are personally invested in the outcome and goals of the organization .”

For small businesses, this new way of managing may be as simple as giving people responsibility for things and making sure their supervisors are open to hearing employees’ input on the subject, Chung-Yan said.

“It’s not the same as giving equal responsibility or the same responsibility to more than one person,” he said. “It’s about making sure managers have an open door and that those who take a risk and share an idea or alert managers to a problem, don’t get punished for it.”

Richard Hayward, a professor of psychology at Harvard University, agrees.

“Shared leadership is not the same thing as co-leadership. The track record of co-leadership, when two individuals equally share leadership responsibility, is not good,” Hayward told BusinessNewsDaily in an email. “Even in teams with widely shared leadership, however, it almost always is wise to make one person responsible for ensuring that members’ contributions are well coordinated and that nothing of importance is overlooked.”

Jeanette has been writing about business for more than 20 years. She has written about every kind of entrepreneur from hardware store owners to fashion designers. Previously she was a manager of internal communications for Home Depot. Her journalism career began in local newspapers. She has a degree in American Studies from Rutgers University. Follow her on Twitter @jeanettebnd.